The end of ownership?

September 12, 2010 8:12 AM

Who owns that copy of AutoCad? A recent court ruling says that restrictive software licenses can forbid resale (and possibly other uses like rental and lending.) Wired has their take on it.

The American Library Association joined the suit because of the profound implications for digital media in public libraries. Here's the ruling from the 9th Circuit (PDF)

One of the troubling side-effects of this ruling is that it may be the end of the first sale doctrine.

posted by warbaby (86 comments total)

So if you can't own it, does that mean it can't be stolen from you?

Doesn't that also mean they should be required to replace it if it was stolen? Because you don't own it, you're licensing it, they should be required to provide replacements at the cost of the media. (Internet downloads have effectively zero cost)

If this also applies to CDs, I should be able to get very low cost replacements for the ones that no longer play due to scratchs, for a low media cost.

What other ways could this blow back at the "manufacturers"?
posted by MikeWarot at 8:27 AM on September 12, 2010 [33 favorites]

Go screw.

(If you dig around in the FreeBSD archives you can find a AutoCAD sales person emailing the FreeBSD mailing lists telling them about how they can buy Autocad for their computer at a special price for a limited time. Yup - They used spam as a 'marketing tool' and their attempts to explain why they mailed a FreeBSD list with text one could read as offering AutoCAD for FreeBSD was amusing. Use the products of spammers at your own risk.)
posted by rough ashlar at 8:29 AM on September 12, 2010

The people behind the Rosetta Stone language learning software, which is otherwise excellent, do the same thing. That's why you don't see used copies for sale despite the obviously large number of expensive copies they sell. Er... expensive single-use, non-transferable licenses they sell. Or something.
posted by LastOfHisKind at 8:35 AM on September 12, 2010 [1 favorite]

One of the troubling side-effects of this ruling is that it may be the end of the first sale doctrine.

Not if it's in the license (i.e. contract) that you can resell.

Which is why SOFTWARE LICENSES MATTER EVEN FOR "REGULAR PEOPLE". it isn't just neckbeard nerds using open and Free licenses. It's people who can see what's coming (not to mention what's already here).
posted by DU at 8:38 AM on September 12, 2010 [5 favorites]

This ruling strengthens the creative commons and GPL, since those exist merely as licensing transfers, not physical ownership.
posted by humanfont at 8:40 AM on September 12, 2010

Which is why SOFTWARE LICENSES MATTER EVEN FOR "REGULAR PEOPLE". it isn't just neckbeard nerds using open and Free licenses. It's people who can see what's coming (not to mention what's already here).

To be fair, though, I do have a neckbeard.
posted by verb at 8:41 AM on September 12, 2010 [2 favorites]

I'm just wondering what kind of license these corporations get when they buy politicians. Are they transferable? Can they trade them like baseball cards? If so who's worth more, Joe Lieberman or Ben Nelson?
posted by delmoi at 8:41 AM on September 12, 2010 [5 favorites]

So when will commercial software licenses become legible and understandable in straight forward terms that won't require a day's reading to get through.
posted by michswiss at 8:43 AM on September 12, 2010 [2 favorites]

Only buy open-source software.
posted by Ironmouth at 9:07 AM on September 12, 2010 [3 favorites]

I'm just wondering what kind of license these corporations get when they buy politicians.

I believe that was answered last Century - DMCA.
posted by rough ashlar at 9:10 AM on September 12, 2010 [1 favorite]

AutoDesk is digging its own grave with an AutoCAD-shaped spork, and has been for years. An incredibly un-competitive price, features that have been broken for decades (can't fillet an arc with a polyline or spline????), heaping ladles of only partially-implemented yet useless features every release meant only to convince shareholders 'progress' is being made (steering wheel!!!) and direct competition from affordable and file-compatible alternatives (Rhinoceros, ARES) will hopefully make this issue moot, at least for users of AutoCAD.
posted by Mei's lost sandal at 9:12 AM on September 12, 2010 [3 favorites]

Interesting. Angry librarians are pretty much never not fun though, so there's that.
posted by shinybaum at 9:14 AM on September 12, 2010

I hate to say this, but this ruling shouldn't surprise you. It's basically been common practice for much software already. Big software purchases have always trended to leases, not sales. Small-priced boxed software has had more of a used market, particularly games, but with the move to online distribution and activation the idea of software you could resell has been slowly eroding.

I'm on the fence about whether software-as-lease is a better model for everyone than software-as-sale. We all know that applying 19th century property law to 21st century intellectual property doesn't make sense. It's the same problem with music, and video: the value isn't in the physical object, it's in the intellectual work expended to create the work.

Still the loss of first sale means that consumers are losing a right they previously had. That's happening de facto in the game market already; Starcraft 2 sets an astonishing precedent as a single player game you cannot resell. What do we get in exchange?
posted by Nelson at 9:14 AM on September 12, 2010 [2 favorites]

This is not a one-sided anti-consumer ruling. As mentioned, many open source licenses depend on circumventing the first sale doctrine. In addition, restrictive licenses allow price discrimination.

For example, academic versions of software restrict resale to non-qualified recipients. If the first sale doctrine could not be circumvented in this way, then one could buy cheap academic software and sell it to the general public. Software vendors would have little choice but to sell the same high priced version to everyone.

So before you bemoan this ruling, consider how many times you have benefitted from things like academic software, whether directly by purchasing it or indirectly by using it at a school or library or by having faculty and staff that used it. Compare that to the number of times you've bought or sold used software.

I know I've benefitted tremendously from academic software but have never sold a used piece of software and only once or twice bought one.
posted by jedicus at 9:18 AM on September 12, 2010 [1 favorite]

The first time I ever realized just how much of a hassle overly-restrictive software licenses could be was when I was trying to sell a copy of Rosetta Stone software that I wasn't using. Every online listing I attempted to make was taken down immediately because Rosetta Stone lawyers would jump on them. I hadn't pirated the software- it was gone, off my computer, and I was trying to get back some of the money I had spent on it, but to no avail. That sort of thing is incredibly frustrating, for the same reasons listed above. I thought I was purchasing a piece of software- after all, it came in a box, and had CDs and a book and everything- but in reality, I was purchasing a nontransferable right to use a piece of software. That shouldn't be buried deep in a EULA, but in big block letters covering a third of the package, like a cigarette box.
posted by BuddhaInABucket at 9:21 AM on September 12, 2010 [17 favorites]

This is not a one-sided anti-consumer ruling.

You say its not. I say it is.

So before you bemoan this ruling, consider how many times you have benefitted from things like academic software

If the vendors can't sell to a market unless they play games with rights - sounds like it is their problem.

Why you trying to make their problem mine?
posted by rough ashlar at 9:23 AM on September 12, 2010 [5 favorites]

The first time I ever realized just how much of a hassle overly-restrictive software licenses could be was when I was trying to sell a copy of Rosetta Stone software that I wasn't using.

Read the license. See what the return policy is. Invoke those clauses.
posted by rough ashlar at 9:24 AM on September 12, 2010

I write software so "their problem" is my problem too.

Anyway, you only make the problem "your problem" if you choose to buy software. Don't like the licensing terms? Don't buy the software!
posted by Nelson at 9:25 AM on September 12, 2010

Huh. I never knew you could resell software, probably because almost all my software was purchased with an academic license. I assumed all licenses forbade resale and the folks on eBay were scofflaws.
posted by desjardins at 9:29 AM on September 12, 2010

Don't like the licensing terms? Don't buy the software!

And where are the terms so you can look at them? Outside on the box? Or inside, where the shrinkwrap packaging keeps it safe from being seen until AFTER the package is opened?
posted by rough ashlar at 9:34 AM on September 12, 2010 [19 favorites]

How about licenses for CDs? Or books? It's like they WANT you to pirate things.
posted by waitingtoderail at 9:34 AM on September 12, 2010

This is not a one-sided anti-consumer ruling. As mentioned, many open source licenses depend on circumventing the first sale doctrine.

I don't really know about that. If you read the GPL, it explicitly states that you do not need to agree to it to use the software, only if you want to distribute it. No one is going to stop you from re-selling media that you purchased open source software on.

Now I suppose you could argue that if you buy open source software, that gives you the right to sell one copy that you modified, using the first-sale doctrine. Which would be like buying books, highlighting them and adding notes, and then re-selling them.
posted by delmoi at 9:36 AM on September 12, 2010 [4 favorites]

Software vendors would have little choice but to sell the same high priced version to everyone.

If vendors aren't selling it to everyone for the same price, somebody is getting ripped off. If the "differential" in "differential pricing" is great enough that it's worth my while to resell my cheap copy or go to Mexico to buy something instead of getting it at the local Walgreens, then it's not "differential pricing," it's theft.

This is a really horrible decision but I can see the logic behind it. It's interesting to speculate how, if at all, it will be fixed so that we can continue to have things like libraries and garage sales. And it's not completely about the difference between physical objects and software.

For years Laitram Co. refused to sell shrimp peeling machines, only placing them under strict lease terms that required the machines to be serviced by Laitram, forbidding resale, and requiring the machine's return at end of life. They had a solid patent and no real competition. This was upheld by the courts and persisted until Laitram's patent expired and competitors were able to enter the market.

However, I think you could make a case that there is a difference between Laitram's model, where they would deliver, install, maintain, and remove the machine as part of the lease agreement, and the way software "vendors" function where the transaction looks exactly like a sale -- one time fee, they send you a physical thing they don't ever touch again, only maintain if they feel like it, don't guarantee to fix if it breaks, and don't want back when you're finished with it.

There clearly needs to be a place for rental and lease type transactions. My company rents industrial equipment. We get paid because you have our stuff, and if you're using it and someone else calls we don't have it to rent to them too. If you stop paying we show up and take it back, and if you break it or drop it in the Gulf of Mexico (really happened last year) we expect you to pay to fix or replace it. But we also guarantee that it will function properly, be properly calibrated, and that service will be available if you need it.

I think the only sane way out of this will be for the Supreme Court or Congress to develop a more rigorous test of whether a transaction is a "lease" or a "sale," requiring a certain level of service involvement for a vendor to claim that a transaction is a lease or license. As to whether something like that will happen, I have no clue; in this political environment any craziness is possible.
posted by localroger at 9:38 AM on September 12, 2010 [13 favorites]

The tighter they grasp, the more will slip through their fingers.
posted by bonehead at 9:39 AM on September 12, 2010 [2 favorites]

And where are the terms so you can look at them? Outside on the box? Or inside, where the shrinkwrap packaging keeps it safe from being seen until AFTER the package is opened?

Many software companies publish their license agreements online. I'm on a phone or I'd dig up links. I know Microsoft does, for example.

Also, virtually all commercial software licenses have refund clauses if you don't accept the license. It's a hassle, but 'money now, terms later' contracts predate software licenses and are not unique to them.
posted by jedicus at 9:39 AM on September 12, 2010 [1 favorite]

Also, virtually all commercial software licenses have refund clauses if you don't accept the license.

And I've had the companies fight me on it.

They fought me until, for the $80 software I filed a fed lawsuit. Got my $1700 back in the end. ($80 + costs)

Time to start opening software in the box stores and not buying them if you don't like the license. A flash mob of box opening consumers going from store to store.....checking licenses to see if they are acceptable.
posted by rough ashlar at 9:45 AM on September 12, 2010 [8 favorites]

I was going to be angry about this but then I realized I haven't paid for software for decades and won't be doing so for the foreseeable future, and that this is the sort of thing that made me decide to stop paying for software.

Unfortunately, I'm not optimistic, especially about libraries. Depending on what type of narcissists are in the government in the future, I fear that public libraries will become a thing of the past, and libraries will become private entities and have to go underground to ensure that knowledge is free and shared, because the way policy is going is that knowledge is a specialized commodity that only those who can afford it can receive it. I think the valuation of capital and money over knowledge and sharing information is going to be one of the reasons the US won't be a world power for long.

That's what this boils down to in my opinion. Capitalism > sharing information.
posted by fuq at 9:58 AM on September 12, 2010 [1 favorite]

Actually, I guess the reality is that Capitalism > Everything.
posted by fuq at 10:01 AM on September 12, 2010 [3 favorites]

One of the concerns is that this may bleed backwards into books, movies and music: it looks on the surface (to a layman) that all it would take is a fine-print license agreement next to the copyright notice and all future secondhand publications become contraband. That may be unrealistic, but it seems inevitable that somebody will try that. Basically, all media could become like MP3's and Kindle, printed, pressed or digital.

It looks very much like the long running trend of turning customers/owners into ratepayers and what used to be commodities are becoming more and more like utilities. This is already implicit in a lot of software (Microsoft for instance) that uses new releases to turn their customers into ratepayers. If you buy, you are owned.
posted by warbaby at 10:16 AM on September 12, 2010 [3 favorites]

The tighter they grasp, the more will slip through their fingers.

Although I agree with the sentiment, please remember that in context, your allusion occurs just before the destruction of a planet.
posted by Trochanter at 10:18 AM on September 12, 2010 [5 favorites]

This is kind of interesting-ish. I can't find the original source, but it does cast the situation in a different light.
Apparently, the original purchaser bought an *update* at a highly reduced price, based on the old version, then sold the old version to the gentleman being sued by Autodesk, but nevertheless kept on using their new version. If this is the case, then:
-- It sounds like the complaint was legitimate, but ...
-- Autodesk should have sued the original purchaser, and not the guy the original purchaser sold it to.

What exactly is new? I would not expect to an old version of any software to pass an online serial number check if it was used to purchase a reduced-price update. However - is it the press's interpretation of the case, or the court's interpretation of the situation that is new?
posted by labberdasher at 10:25 AM on September 12, 2010 [1 favorite]

If vendors aren't selling it to everyone for the same price, somebody is getting ripped off.

Are you also a big fan of regressive taxation? Because that's essentially what you're advocating.

Anyway, often the vendors aren't selling the exact same product when they engage in price discrimination. For example, academic versions of software cost less, but they also have a more restrictive license (e.g., no resale, no resale to non-academics, only usable while you're in school, only for non-commercial use, etc). You can pay more and get a less restrictive license. Sometimes academic versions lack certain features or do things like put watermarks on documents. So it's often not true price discrimination but rather more product differentiation.

I think the only sane way out of this will be for the Supreme Court or Congress to develop a more rigorous test of whether a transaction is a "lease" or a "sale," requiring a certain level of service involvement for a vendor to claim that a transaction is a lease or license.

I don't think there's much legal basis for the US Supreme Court to become engaged in contract law in that way.

In any event, 'lease' and 'sale' are already well defined virtually everywhere by the UCC. To wit: ""Lease" means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease."

"A "sale" consists in the passing of title from the seller to the buyer for a price."
posted by jedicus at 10:28 AM on September 12, 2010

Autodesk should have sued the original purchaser, and not the guy the original purchaser sold it to.

Autodesk didn't sue the guy who tried to sell the copies on eBay. Autodesk just asked eBay to take down the auctions, then the guy sued Autodesk for a declaratory judgment that he had the right to sell the copies.
posted by jedicus at 10:30 AM on September 12, 2010

Depending on what type of narcissists are in the government in the future

I don't think the 'narcissists of government' will be the issue.

The corporations who want to make a buck via the force of government will be the issue.

Corporations are sociopaths - not narcissists.
posted by rough ashlar at 10:37 AM on September 12, 2010 [2 favorites]

jedicus - ah, thanks. My reading-fu appears to be weak.

Nonetheless - I do wonder why AutoDesk didn't just let the auctions go through, then when the buyer tried to install the software, let them know that the serial number was already in use, and that they had just been scammed. I think the "caveat emptor" would have trickled down pretty quickly.
posted by labberdasher at 10:41 AM on September 12, 2010 [1 favorite]

What exactly is new?

Nothing, really. Given the facts of the case* and the legal and historical precedents involved, Vernor's case was a longshot. He was likely able to push the case because he was represented by the Public Citizen Litigation Group, an advocacy group willing to play long odds. It only came up to the Ninth Circuit because Vernor had a right to appeal there (the circuit courts can generally be appealed to as of right; it's not like the Supreme Court, which generally gets to pick and choose its cases). I don't expect the Supreme Court to take up the case.

* Basically, Autodesk busted an architecture firm (CTA) for copyright infringement. It settled with CTA and sold it 10 copies of AutoCAD R14. CTA accepted the license, which says the license is not transferable. CTA then bought copies of AutoCAD 2000 at the upgrade price and accepted the upgrade license which required destruction of the copies of R14. CTA sold some of the copies of R14 to Vernor in violation of the R14 and 2000 licenses. Vernor tried to sell them on eBay, Autodesk asked eBay to take them down (which it did), then Vernor sued for declaratory judgment that he had the right to resell the copies because of the first sale and essential step defenses.
posted by jedicus at 10:44 AM on September 12, 2010

Time to start opening software in the box stores and not buying them if you don't like the license. A flash mob of box opening consumers going from store to store.....checking licenses to see if they are acceptable.

I would probably support that. As much as I support the principle that contracts should be extremely flexible, I do also think that people need to be educated that a lot of contracts are pretty one-sided. There needs to be more competition in the market for consumer-friendly commercial licenses.

I suppose there is some. Apple's family pack licenses are a (modest) example. But there should be more. It would be great if you could select from a Creative Commons-like array of commercial licenses when buying software (CC-like in the sense of flexibility, not in terms of the rights granted). You could pick and choose license features, which would be reflected in the price you paid. As it stands now it's not really practical to negotiate license terms with most companies.
posted by jedicus at 10:50 AM on September 12, 2010

As I recall, previous case law on the subject has said that "Merely labeling a transaction as a lease or license does not control. If a transaction involves a single payment giving the buyer an unlimited period in which it has a right to possession, the transaction is a sale." Now, that seems blindingly obvious to me, but this new ruling appears to contradict that.

Of course, case law is wildly inconsistent on the subject. 9th Circuit says yes, you can do that. 3rd, 4th, 5th say no, you can't. I'd say it needs to go to the Supremes, but I don't trust this Supreme Court.
posted by kafziel at 10:51 AM on September 12, 2010 [2 favorites]

I do also think that people need to be educated that a lot of contracts are pretty one-sided.

Damn straight they are. Any time I get one of them I modify 'em on the spot and then accept the modified contract.

As it stands now it's not really practical to negotiate license terms with most companies.

If you want what they are selling - modifying the contact leads to the sales-pleabe saying "no" and thus no sale.
posted by rough ashlar at 10:54 AM on September 12, 2010 [1 favorite]

I don't trust this Supreme Court.

At what point in time was there a 'trustworthy' SC?
posted by rough ashlar at 10:55 AM on September 12, 2010

jedicus - oh, good. I wasn't off my rocker, then.
The way I see it it's not an issue with the license being non-transferrable, but with the license being unique. This company was simply trying to sell its cake, and eat it, too. Does the ruling have anything to do with the first sale doctrine or not? It just sounds to me as if either the court ruled on something they had not need to, or the press is interpreting it wrongly.
posted by labberdasher at 10:58 AM on September 12, 2010

I don't know what you guys are worried about. When I found out I'd only bought licenses to media on DVD, and Blue-Ray came out, those companies were cool and happily transferred my licenses over to the new format, no questions asked! This licensing is great!

of course the transfer fee was exactly the same as buying the full-price replacement newer medium copies.
posted by davemee at 11:11 AM on September 12, 2010

Also, virtually all commercial software licenses have refund clauses if you don't accept the license.

Yes, but unless you want to make use of that clause to debundle software and hardware, who cares? If you don't accept the license, but you've already bought the software, install and use it anyway. USC Title 17 gives you that right; you don't need to first agree to an unseen contract with no consideration provided.
posted by roystgnr at 11:15 AM on September 12, 2010

Doesn't that also mean they should be required to replace it if it was stolen? Because you don't own it, you're licensing it, they should be required to provide replacements at the cost of the media. (Internet downloads have effectively zero cost)

If this also applies to CDs, I should be able to get very low cost replacements for the ones that no longer play due to scratchs, for a low media cost.

*


*


*


That is the sound of their lawyers, lobbyists and congressmen giving a shit.
posted by Devils Rancher at 11:21 AM on September 12, 2010

I'm always kind of amused and kind of appalled by licenses that, on the one hand, insist that you don't own this, you're only licensing it and you have limited or no other rights, but on the other hand, we deny that we have any responsibility for it or any liability in this at all if anything goes wrong.
posted by mhoye at 11:29 AM on September 12, 2010 [3 favorites]

If you don't accept the license, but you've already bought the software, install and use it anyway. USC Title 17 gives you that right; you don't need to first agree to an unseen contract with no consideration provided.

Citation please? Title 17 is pretty long, and I don't recall where the "nobody actually has to accept software licenses in order to install and use software" section is. You should probably tell Zeidenberg, too, since evidently his lawyers screwed up big time.
posted by jedicus at 11:43 AM on September 12, 2010

GrokLaw has some interesting commentary:

Since one of the most active of the antiGPL operatives had a dream to undermine the GPL, and hence Linux, by first sale using this case, I am personally gratified.

Unintended consequences are everywhere, it would seem.
posted by RobotVoodooPower at 11:49 AM on September 12, 2010

Don't like the licensing terms? Don't buy the software!

Except the publisher can shrinkwrap the EULA in the package, and you don't even get to see it until installation time. (And, go ahead, try and return opened software.)

Our i.p. system in this country has lost it's fucking mind. Sure, you absolutely have a right to make a copy of that DVD you bought - but you can't break the lock to get to the stinking data. That's antithetical to the spirit of the law, it's anti-consumer, and it's Alice-in-Wonderland fucking crazy. Same with practically-never-expiring copyrights, and corporate ownership of genes and germs.

If we can only buy licences, then the publishers absolutely must be responsible for replacing scratched discs, etc. Otherwise, this is a blatant shakedown - a one way anti-consumer street.

I earned a degree in Marketing 30+ years ago. If I had suggested back then that a company should willfully treat its customers as adversaries, I would have been laughed out of school. And, believe me, corporate ethics wasn't high on the list then, either.

If these companies think that this attitude will do anything other than exacerbate their "piracy problems", they are far dumber than they are acting.
posted by Benny Andajetz at 12:03 PM on September 12, 2010 [3 favorites]

So this panel has decided that you not only don't own the software, you dont even own the license. They have, de facto, turned all software into a rental agreement.
posted by MrLint at 12:04 PM on September 12, 2010

one question. why would companies develop software if people could just sell copies of it to everyone they wanted? They are, after all, in it for the money.

So this panel has decided that you not only don't own the software, you dont even own the license. They have, de facto, turned all software into a rental agreement.

The question is whether or not a term forbidding sale or distribution to others is legal in such an agreement. The terms of the license themselves are what are at issue here.
posted by Ironmouth at 12:33 PM on September 12, 2010

So before you bemoan this ruling, consider how many times you have benefitted from things like academic software, whether directly by purchasing it or indirectly by using it at a school or library or by having faculty and staff that used it. Compare that to the number of times you've bought or sold used software.

That's your silver lining? Let me guess: you are in academia, and you don't play video games at all. How's the view from your ivory tower? Seriously, academic software hasn't been a part of my life since I was a student. And I buy and sell used software very often, and there's a thriving community and set of businesses that do likewise. I'm glad to know this will be great for you and a tiny minority of people, but...
posted by Edgewise at 1:02 PM on September 12, 2010

Oddly, the district court ruled in favor of Vernor and the 9th overturned on appeal by Autodesk.

So the lower court ruling was that the license agreement was not binding on Vernor. Evidently, that was in error. the part that is unclear to me is not the existence of a license agreement, but rather what constitutes a valid and enforceable license agreement.

I mean, it's obviously possible to write a license agreement that is so restrictive and lopsided that it's invalid and thus doesn't overcome the first sale doctrine. That's what the district court in Seattle more or less said. And now the 9th says the opposite.

"We read Wise and the MAI trio to prescribe three consider-
ations that we may use to determine whether a software user
is a licensee, rather than an owner of a copy. First, we con-
sider whether the copyright owner specifies that a user is
granted a license. Second, we consider whether the copyright
owner significantly restricts the user’s ability to transfer the
software. Finally, we consider whether the copyright owner
imposes notable use restrictions."

That looks like the court is trying to restrict the issue to software (which is different from other copyrighted works), but it doesn't really address the ALA concerns. One example is journal subscriptions being treated as licenses, a recent practice that has put some journals out of reach of libraries due to the high cost of the licenses compared to subscriptions.
posted by warbaby at 1:09 PM on September 12, 2010

I can't believe this thread went all this far without anyone mentioning the dark overlord that is adobe. alas, no matter how much they fuck up there simply isn't a viable alternative at present. they seriously need to get FCP'ed like avid did.

this is going to take two comments max until some shyster says gimp, even though it's total turdware.
posted by krautland at 1:21 PM on September 12, 2010

Except the publisher can shrinkwrap the EULA in the package, and you don't even get to see it until installation time. (And, go ahead, try and return opened software.)

This reminds me of a funny story from my retail days. At the time, I was working at a university, and a professor had come in asking for a copy of Office. I sold him one. A few days later, he returned to the store with the box, all of its contents neatly packed back in, and no shrinkwrap. It's been years, so maybe the shrinkwrap was included inside the box. I can't remember.

Anyway, the guy brought the box up to me and said something like, "I bought this from you the other day, and when I opened it, I read the agreement. Well, I don't like the agreement, and I don't agree. I'd like to return it."

I was amazed. I'd never seen a customer do that before, and never saw it again. I took him at his word and made sure that guy got a refund. :)
posted by Mikey-San at 1:32 PM on September 12, 2010 [1 favorite]

That's your silver lining? Let me guess: you are in academia, and you don't play video games at all. How's the view from your ivory tower?

I am in academia, but I also play video games. I have bought a few used games over the years, though never sold any. With one exception (WoW), I don't buy non-transferable games, but neither do I think companies should be prevented from using that business model if they choose.

The view from my ivory tower is that contract law should be flexible to allow parties to negotiate agreements mostly free from government-imposed terms. To my mind the problem here is the inability to easily negotiate terms with the sellers of software, not the existence of legal tools that make restrictive licenses possible.

I'm glad to know this will be great for you and a tiny minority of people, but...

The tiny minority of virtually every K-12 and college student in the country? Of virtually every teacher, professor, or school staff member? Of countless non-profits and governments? Of all the tax payers who have a lower tax burden because the schools and governments they support don't have to pay as much for software?

I think you'll find that it's the buyers and sellers of used software that are in the minority, actually. And nothing about this ruling means that people can't buy and sell used software; it just means that they have actually buy copies in the first place. If a company isn't willing to sell a transferable copy, then take your business elsewhere. If first sale rights are valuable, then the market will respond.
posted by jedicus at 1:47 PM on September 12, 2010

there simply isn't a viable alternative at present.

I believe scribd and the gimp do a far better job than version 1 of photoshop or Adlus pagemaker.

The alternatives work. They may not work like you expect, but they work.

Of all the tax payers who have a lower tax burden because the schools and governments they support don't have to pay as much for software?

So you'll be joining me and others in our quest to have all Open Source solutions in government to lower our tax burden then?
posted by rough ashlar at 2:05 PM on September 12, 2010 [1 favorite]

install and use it anyway. USC Title 17 gives you that right; you don't need to first agree to an unseen contract with no consideration provided.

MEtafilter - Where you should get your legal education.

Do you have citations and case law on that?
posted by rough ashlar at 2:07 PM on September 12, 2010

I have had to use Matlab for a few grad school classes. If you're not familiar with it, Matlab is a mediocre numerics package that has a bunch of very well designed "toolboxes" full of hundreds and hundreds of useful functions. The core system and the toolboxes are licensed separately, and some of the toolboxes cost thousands of dollars per license. Each license can be used by one person at a time.

For one class assignment, we had to take code written by the professor and extend it to do some other stuff. But the professor's code used some functions from a toolbox -- one our university computer labs only had 15 licenses for! There were 60 or so students in the class, and I was definitely not among the first 15 to start working

The first thing I tried was copying the code for the toolbox to my own computer (I had my own copy of Matlab). It didn't work. Then I figured out that the function the professor used wasn't that complicated, so I spent an hour or so implementing it myself. Matlab recognized that the name of the function was the same as one from a toolbox. It accused me of stealing and refused to start up until I reinstalled.

I slinked back to the computer lab, feeling like a criminal, and finished the assignment in the middle of the night after most of the other students were done.

Later I had an internship at a big engineering firm that had more than 500 developers working on an enormous Matlab-based project. This company was supposedly the largest Matlab customer in the world, spending tens of millions a year on Matlab. While I worked there, I learned that they never had enough licenses for some of the critical toolboxes, and engineers often had to work in the middle of the night to get access to them.
posted by miyabo at 2:14 PM on September 12, 2010 [9 favorites]

How's the view from your ivory tower? Seriously, academic software hasn't been a part of my life since I was a student.

Hey now, I'm a student, and you should know that my part of the ivory tower doesn't even have windows.
posted by fuq at 2:15 PM on September 12, 2010 [1 favorite]

"one question. why would companies develop software if people could just sell copies of it to everyone they wanted? They are, after all, in it for the money."

This case isn't about making copies; it's about taking the software that the average person would think was a sale and not letting you transfer that software to anyone else. You can't sell it, give it or even inherit it. A strict reading of the AutoCAD licence (at least as of 5 years ago) would require a company changing it's name to buy all new copies of AutoDESK's software. Big Architectural firm A buys medium Architectural firm B and A has to by new licenses for everyone in B.

The interesting thing to me is AutoDESK offers a subscription service; how they can then restrict a more conventional appearing purchase in this manner is mystifying. I sure wish that this case didn't revolve around a software product that was part of an upgrade path purchase.

"If a company isn't willing to sell a transferable copy, then take your business elsewhere. If first sale rights are valuable, then the market will respond."

This is a ridiculous libertarian fantasy. Something that was recognized a century ago with regards to books which don't have the user base lock in considerations of software. I'm sure, as they've attempted several times, that the MPAA and the RIAA would love to kill used sales of their product. The case law regarding books was put into place not preemptively but as a reaction to book publishers trying to eliminate first sale rights.
posted by Mitheral at 3:12 PM on September 12, 2010 [1 favorite]

"one question. why would companies develop software if people could just sell copies of it to everyone they wanted? They are, after all, in it for the money."

The hell are you on about? This isn't a copy — it's the same as a record label saying that you were licensing the CD you were listening to, and thus couldn't sell that CD to someone else when you were done with it.
posted by klangklangston at 3:46 PM on September 12, 2010 [1 favorite]

Video game companies only wish they could do this sort of thing.
posted by ShawnStruck at 4:13 PM on September 12, 2010

klangklangston: This isn't a copy — it's the same as a record label saying that you were licensing the CD you were listening to, and thus couldn't sell that CD to someone else when you were done with it.

It's going to be interesting to see how this plays out. Two years ago in UMG Recordings, Inc. v. Augusto, a 9th Circuit district court heard a case involving promo CDs sent out by record companies to music industry insiders ahead of album releases. The CDs had labels that said "This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws."

Following an earlier 9th Circuit case (Wise), the court looked past the "license" language of the label to the "economic realities of the transaction." One of the things the court found convincing is that UMG never made the people it sent CDs to return the CDs, or otherwise recover possession of them. The Court said this was a "strong incident of ownership through a gift or sale."

The district court in this present case also relied on Wise, and found the situation similar. Autodesk never regained ownership of the disks and packages that it licensed to CTA, the original purchaser. At the time of purchase, CTA never even agreed to destroy the copies upon upgrade - that came as part of an upgrade agreement signed several years later. The court eventually concluded that Autodesk licensed the USE of its software, but that CTA owned the COPIES.

Now that the 9th Circuit overturned that reasoning, it's no longer safe to assume that a Wise analysis of license terms to determine license/sale controls. So... does this mean that publishers can now sell CDs or books with license agreements in the booklet or first page forbidding resale? The court mentions that the ALA brought up this concern, but it basically says to let Congress modify the first sale doctrine if this becomes a problem.

...dunno about you guys, but I don't really have a lot of faith in Congress passing substantive copyright reform anytime in the next few years
posted by cobra_high_tigers at 4:35 PM on September 12, 2010

jedicus: Are you also a big fan of regressive taxation?

Sales are not taxes. The government can do what is necessary to document that you are deserving of a price break because you are poor; a business can't. The government has already made it plain that a business can't refuse me service or charge a different price because of my race, handicap, or gender. They shouldn't be able to do so because of my occupation or zip code either. Or do you think it makes sense that the Ferrari-driving undergrads whose parents are putting them through Ivy League colleges can also buy software for 1/10 the cost of someone who actually needs it to do work?

If the government decides that you are deserving of cheap software because you're a student, poor person, or small business, they can raise taxes to pay for a program that identifies such people and supplements the cost or buys the software for them. For the software vendor to decide to charge me more because of my area code is theft. Period.

When looking up the Laitram case I noticed that one of the cases against them was with respect to differential pricing for customers in different geographic areas; this was upheld in the 1960's but the book doubted it would be valid law today for reasons I ironically couldn't see because they weren't part of the Google Books preview :-)

I don't think there's much legal basis for the US Supreme Court to become engaged in contract law in that way.

Why not? If this case was the Court of Appeals' business it could certainly also be taken to the SC, which might decide to agree with the lower court that the transaction was crafted in an unreasonable way which misled the consumer and reached for a right the vendor does not have.

"In any event, 'lease' and 'sale' are already well defined virtually everywhere by the UCC. To wit: ""Lease" means a transfer of the right to possession and use of goods for a term in return for consideration..."

Except that what Audesk sold this guy doesn't really seem to be either a lease or a sale; for one thing it doesn't specify a term, and for another the buyer does not "take possession" of anything from Autodesk that Autodesk can ask to be returned if the lessee fails a payment. This is a "lease" which is deliberately designed to resembled a sale, and most people would consider it a sale until they read a bunch of fine print that's probably inside the box and hardly anybody ever reads. A reasonable person might very well consider that fraud.

The government has set up all kinds of restrictions on the kind of contracts people can write, which has been necessary to keep people from using contract law to do fucked up things. For example, you can't sell your house on the condition that it will never be resold to a black person, or a woman, or a Jew. You might think you should have that right, and you did until mid last century, but you don't and frankly I think this makes the world a better place.
posted by localroger at 4:54 PM on September 12, 2010 [1 favorite]

Now, I'm not terribly well informed in this area (I get most of my info here- great thread BTW), but won't these issues disappear when the internet gets fast enough to deliver sophisticated software as a service (SAAS)? I'm an architect-like person, and the software we use is just the worst for high per-license costs, cruft, half-baked sales-point features and even worse- having to deal with unholy slews of inter-referenced files and object libraries across multiple file servers.

Having the manufacturer host the software and file system would, from my point of view, solve a lot of problems, especially with regards to portability: if I bring a laptop with a big BIM model to a client's place, I have to make sure that all of the linked files are on the local drive and properly referenced, and that the software is set up so that I'm not fumbling with unfamiliar key commands and window layouts. If I could access remote-hosted software (which wouldn't be that different from, say, a MMORPG) through an account that contained all of my environment settings from a low-horsepower laptop, I would be impressed. And I wouldn't have to worry about rolling out new versions every year and getting people to use them.

That would be WORTH $5k a seat. So how long until we're there, my neckbearded friends? Or is there a sinister dystopian undertone I'm not picking up on?
posted by Casimir at 5:27 PM on September 12, 2010

The government has set up all kinds of restrictions on the kind of contracts people can write, which has been necessary to keep people from using contract law to do fucked up things.

Yup. You may want to call it a 'license' like the jig for wordworking that had a 'license' which claimed you could not use the jig to make more jigs. But that doesn't make it "a truth" .

Meanwhile the ACTA is still called 'secret' so it could very well have bits in it that would allow the destruction of the 1st sale doctrine.
posted by rough ashlar at 5:32 PM on September 12, 2010

I would probably support that. As much as I support the principle that contracts should be extremely flexible, I do also think that people need to be educated that a lot of contracts are pretty one-sided. There needs to be more competition in the market for consumer-friendly commercial licenses.

There is no incentive for the companies who create these licenses to make them more consumer-friendly. Obviously the profit motive hasn't produced any such result, but instead has produced overly long and opaque legal documents. People aren't going to spend an hour going over each license with a lawyer before deciding what to do.
posted by krinklyfig at 6:04 PM on September 12, 2010

People aren't going to spend an hour going over each license with a lawyer before deciding what to do.

Ever READ the Microsoft licenses?

Used to do a gig for a business law office. None of the 9 lawyers had read the Microsoft license 'till there was a fight over FreeBSD being in the office because one of the lawyers brought up 'are we licensed'. 3 of the lawyers did say, outside of the meeting, that they didn't like the Microsoft license but what choice did they have?
posted by rough ashlar at 6:09 PM on September 12, 2010

There is no incentive for the companies who create these licenses to make them more consumer-friendly. Obviously the profit motive hasn't produced any such result, but instead has produced overly long and opaque legal documents. People aren't going to spend an hour going over each license with a lawyer before deciding what to do.

Well unless someone could market the simplified licensing model as a competitive differentiator. I mean isn't that really one of the main drivers for open source. This is a lot of the argument I hear about android. People want it over iOS because they appreciate the more open nature of the license.
posted by humanfont at 6:28 PM on September 12, 2010

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posted by Xoebe at 7:04 PM on September 12, 2010

Let's remember here that this only applies to a copy of the software for which the license had been revoked. If the original owner wanted to sell the old copy, he should have bought the full-fare license of the new version, and then he would have been able to sell the old one.

And remember too that AutoDesk didn't sue the guy, the guy sued them. He was wrong, even though he probably thought he did have the license to the software.

Same thing as buying a $99 upgrade of Windows 7 and selling your old Vista disk: can't do it. (OK, well you *can* sell the disk, but not the license to use the software.) The price of Windows is $199, or $99 + your old license.

For the record: when you buy software or books or CDs or whatever, you don't own that IP. You just own the physical medium and a license to use the IP. So this isn't the end of ownership, just a continuation of how intellectual property has worked since the discovery of the concept.

It is just like photography. You can buy a copy of a photograph for a few dollars. But you don't retain any rights to the IP of the photo. If you want ownership of the IP, you have to buy that from the photographer for presumably a lot more money. But I guess it is different if EVIL CORPORATIONS are involved.
posted by gjc at 7:11 PM on September 12, 2010

gjc, the whole point of the first-sale doctrine is that while you don't have the right to publish something just because you own the physical copies, you do have the right to view them. This has particular import with regard to letters sent to you by other people -- technically, you don't have the right to republish them because while you own the physical letter,and you have the right to read it as often as you want and even to sell it at auction as an artifact, you don't have the copyright to the contents that would permit publication. While this is often glossed over it particularly impacts authors who want to use letters sent to them in biographical works when the source or estate refuses.

But what Autodesk is claiming here is something much broader, that not only do you not own the copyright to the letter you can't sell or give it to someone else or even include it as a bequest if you die. And part of what is at issue here is the difference between "viewing" a photograph you own but maybe don't have IP rights to, and "using" a piece of software you got as physical media in a legitimate transaction from someone who really has destroyed all other copies and isn't using it any more. The rights Autodesk is claiming go well beyond what even the most IP-owner-friendly interpretations have ever granted the creators of things like books and audiodiscs. If this stands it will radically change the way we relate to used media of all types, and almost all in ways people really won't like.
posted by localroger at 7:25 PM on September 12, 2010

I would like to know how slippery this slope is. Because you just know the RIAA and MPAA are salivating at this news.
posted by Civil_Disobedient at 7:59 PM on September 12, 2010

gjc: For the record: when you buy software or books or CDs or whatever, you don't own that IP. You just own the physical medium and a license to use the IP. So this isn't the end of ownership, just a continuation of how intellectual property has worked since the discovery of the concept.

Except that the court didn't hold what you just said. The court held that customers who buy software like this don't own the physical medium. They merely retain possession of it under a perpetual license from the publisher.

It is just like photography. You can buy a copy of a photograph for a few dollars. But you don't retain any rights to the IP of the photo.

This is not accurate. One of the exclusive rights reserved to the author of a work is "to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending" (17 USC s106(3)). The first sale doctrine, encoded in 17 USC s109(a), removes this right from the author (with regards to the individual copy that was sold) and grants it to "the owner of a particular copy."

That's why Autodesk, the MPAA, and the software industry lobbying groups were pushing so hard for the court to find that the company who originally paid for the software from Autodesk (CTA) never owned the physical media in which the intangible work was embodied, but rather entered some form of license that involved a single up-front payment, no repossession of the software by the owner at the time the license terminated, and a possibly unlimited duration. That's why CTA couldn't legally sell the media to Vernor later - they never owned it.
posted by cobra_high_tigers at 8:08 PM on September 12, 2010

The ALA fears that the software industry’s licensing practices could be adopted by other copyright owners, including book publishers, record labels, and movie studios.

These are serious contentions on both sides, but they do not alter our conclusion that our precedent from Wise through the MAI trio requires the result we reach. Congress is free, of course, to modify the first sale doctrine and the essential step defense if it deems these or other policy considerations to require a different approach.

This looks like the court is signaling the slope could be very slippery but it's not their problem.
posted by warbaby at 8:44 PM on September 12, 2010

"For the software vendor to decide to charge me more because of my area code is theft. Period."

Thank God! I was worried there'd never be a more inane equivalency than "Downloading is theft!"
posted by klangklangston at 11:53 PM on September 12, 2010

cobra- I'm not sure that's exactly what the opinion said, it is hard to tell. It said that AutoDesk retains title to the copy of the software. That can mean the media itself, or the particular instance of the data on it. I'm not sure.

But I still maintain it is irrelevant, for the following reasons:

1- The guy wasn't selling just the media, because a box and a couple of cds isn't worth the hundreds of dollars he was selling them for. He, rightly or wrongly, believed that he was selling a license to use the software.

(I do sympathize with him on the confusion of it: how was he to know whether he was buying a legit copy or not? Hopefully a result of the case will be that software vendors print on the package what kind of license there is.)

2- First sale has always been restricted, if the publisher of the IP transfers it with some kind of restriction. Nothing new here. First sale only applies if it was a sale of a copy, not a use license or a restricted sale.

3- CTA is the bad guy here. First, it appears that they only ever bought the software because they got caught pirating it. (In the pdf of the decision) Second, they bought an upgrade, which required them to destroy the old copies. Third, they not only didn't destroy them, but sold them to some guy.

I see both sides here- I can perfectly understand a software vendor wanting to maintain control of their software. This isn't a $40 game, but a $3000 software package that enables companies to save millions over the old ways of designing stuff. They have a fairly limited market, an expensive to produce product, and as such, if someone is using the software without paying for it, they are losing significant money. (*)

Maybe they are being dicks about it, but nobody is stopping someone else from building a software package with nicer licensing.

But I can also understand that someone who pays $3000 for a piece of software and isn't using it anymore would probably want to try and sell it.

Actually, the license does say you can't transfer it *without notifying AutoDesk*. Maybe that's all it takes? "Hey, our engineering division got sold to XYZ Corp., so we are transferring our 100 licenses to them. Please update your records."

But I'm one of those freedom people. If I create something, I should be able to make money off of it any way I can. If that means charging people a nickel every time they launch the software, or giving it away for free, or $6 million a copy, I should be able to make those mistakes. And if I think I'm buying something, I should probably read the fine print. If the government wants to mandate that the fine print has to be on the front of the box and in 12 point, that's fine with me. Knowledge is good.

(*) Frankly, I like some of Microsoft's licensing in this respect. Are you just a tinkerer or a student? Go ahead and download VisualStudio and have fun. But if you are making money off of it, you got to pay the piper. Where they screwed up is in hiding the costs of the operating system and software like Office. You get it free with a $300 computer, but if you buy a retail copy of Windows and Office, it's like $500. Doesn't make sense, and people don't respect it.
posted by gjc at 4:11 AM on September 13, 2010 [1 favorite]

"For the software vendor to decide to charge me more because of my area code is theft. Period."

Maybe. Probably more like extortion or something like that. But if all they can get for the software in Microburgistan is $400 a copy because of standards of living and exchange rates and all that, wouldn't they be bigger dicks if they said "Yeah, sorry, it's $3000."? I know I'd rather pay the $400 and lose the right to sell it in the US than pay the $3000.

Of course, the question is "why is it $3000 in the US if they will take $400 for the same thing somewhere else?" First, it's probably not the exact same thing, and second, because they can. This isn't a life necessity like food or water. They can charge whatever they want. And hopefully some competitor will say "shit! $3000 a copy? I bet we could be millionaires selling our own stuff for $2000." And the price settles out.

Thank God! I was worried there'd never be a more inane equivalency than "Downloading is theft!"

About as inane as the people who suddenly become "experts" in common law and say it can't be theft if it isn't tangible.
posted by gjc at 4:19 AM on September 13, 2010

I work for an industrial supply company. You know what we do when we sell you something? We start with how much it cost us, and we add enough to that to cover the rent for our building and the salaries of our employees and the Christmas bonuses and so on, and we charge you that much.

You know what we don't do? We don't charge you $1500 for something that cost us $50 just because we can. We don't do that because you drove up in a Lexus instead of a Toyota Corolla. We don't do it because you're the oil industry and we know you have metric shitloads of money. We don't do it because we are subsidizing a side charity on the side giving scales away to n00bs in the education community so we can get them used to working with our stuff early in their education.

Now as to why we don't do it partly that's because of competition, because if we did that someone would undersell us; but maybe we could get away with it just as IBM managed for years. According to The Soul of a New Machine, IBM was charging $2M for machines that only cost $200K to build; competing with that became Data General's market, and IBM's counter-strategy gave us the acronym FUD. So maybe we could get away with it. But I'd consider it shitty business practice, and if I ever found out you were doing that to me, I'd become a Data General customer and never do business with you again.

Except that in this case, as with Laitram and their shrimp peelers, there is no Data General to sell for a fairer price because the government is propping up the monopoly through IP law. So so much for the free market.
posted by localroger at 5:16 AM on September 13, 2010

What if automakers applied this line of thought to their cars?
posted by TedW at 6:23 AM on September 13, 2010

I hope this ruling doesn't apply to cracked versions downloaded with bittorrent.
posted by mecran01 at 7:11 AM on September 13, 2010

"About as inane as the people who suddenly become "experts" in common law and say it can't be theft if it isn't tangible."

Not really, since that argument's almost never made. But hey, good luck on them scare quotes.
posted by klangklangston at 8:25 AM on September 13, 2010

gjc: It said that AutoDesk retains title to the copy of the software. That can mean the media itself, or the particular instance of the data on it. I'm not sure.

In the sense that the Copyright Act uses the term "copy," it means the media. From the definitions (17 USC §101):
“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed... The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.
posted by cobra_high_tigers at 10:03 AM on September 13, 2010

You may not own your house, either: Resale Fees That Only Developers Could Love - NYTimes.com.
posted by psyche7 at 10:49 AM on September 13, 2010

I know this is about lease holder rights vs. owners rights regarding software--and not about whether Autocad or Microsoft are more eviler than one another, but with developments with suppression of dissent groups in Russia (MeFi link to NYT article), I move any apps I can to open source and away from the onerous and objectionable software licenses in effect.


When I do use licensed software, I make sure that it is legitimate and without any sketchy provenance. But I would be hard pressed to make sure that every one of my licensed copies of Office 2003 still has the license document on site.

And, now, I'm not trying to be a smartass, but as people move out of our neighborhood, they donate computers. They typically wipe their personal data, but leave the programs on it. Where in the range of gray does that leave those programs?
posted by beelzbubba at 11:16 AM on September 13, 2010

I think I still have my 1998 copy floating around somewhere
posted by biggles76 at 5:01 PM on September 13, 2010